Swiss banking giant UBS is close to reaching a deal with regulators to settle charges of interest rate manipulation, sources told The Wall Street Journal.
It is expected that the bank will pay more than $1 billion to settle charges that it attempted to manipulate the London inter bank offered rate, or Libor, which is an average lending rate among banks and is used to establish the rate for hundreds of trillions in commercial and personal loans and other contracts.
UBS would be the second bank to settle charges against it for Libor manipulation. Last summer, British bank Barclays paid $450 million to settle charges against it. Meanwhile, regulators have been investigating at least a dozen other major banks.
The scandal shook Barclays right up to the top. Several top executives, including its chief executive officer, were forced to resign after the settlement was announced.
The New York Times reported Thursday that a deal with UBS and regulators from the United States, Britain and Switzerland could be announced early next week.
Among new developments, Royal Bank of Scotland and Deutsche Bank have both indicated they were preparing to pay settlements with authorities.
British regulators Tuesday arrested three people involved in interest rate manipulation, including Thomas Hayes, who worked as a trader for UBS in Tokyo from 2006 to 2009 and then went to Citigroup, where he was fired for allegedly attempting to involve himself with rate manipulation.
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